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Lord Lyell: My Lords, I have listened to 10 minutes of explanation by the noble and learned Lord, Lord Simon. I hope that I have been paying adequate attention to proceedings on the Bill tonight. The noble and learned Lord made the formula reasonably clear, step by step. I am sure he will accept that when he compares what he explained with some of the green pound calculations which we, as agriculturists, have to carry out, it seems fairly simple.
Lord Lyell: Certainly not why, but I suspect that the officials who are explaining it to the absent parents or the concerned people would master the formula fairly quickly. The noble and learned Lord put his finger on the reason for his amendment when he said that it would be difficult for the official to explain why. In my own mind, the reason for the complicated formula is that the whole area is fraught with many factors which have been brought in step by step as the legislation has proceeded.
Lord Lyell: My Lords, with the leave of your Lordships' House, not tonight as I look happily at the gleam in the eye of my noble friend on the Front Bench who is burning to explain it himself. He can do it in half the time.
Lord Mackay of Ardbrecknish: My Lords, the noble and learned Lord, Lord Simon, has read out the formula used in this instance. Of course, given way he put over the formula, it sounds complicated. However, as my noble friend Lord Lyell pointed out, a simple blackboard or, in these modern days, an overhead projector would allow a child with a fairly basic knowledge of algebra to follow the formula. There are not too many complications in it; it is all letters. There are no sines and cosines, no tangents, integrations or differentials. If the noble and learned Lord thinks that it is a difficult formula, then he has clearly not seen any of those used by mathematicians, engineers, designers and a host of other people whose formulae would give him much cause for complaint.
The formulae are laid out and what the letters say is clearly laid out. It is complicated, but when it is seen on paper it is a good deal easier to follow than when it is read out. I have to tell the noble and learned Lord that that is the case with all formulae of any kind, even simple ones.
The amendment would mean better off absent parents paying only the maintenance requirement calculated for their children's basic maintenance needs. They would no longer pay the additional element, irrespective of how high a level of income they have. The formula which the noble and learned Lord read out was part of the formula laid down in order to calculate the additional element.
Perhaps I may explain it without the use of the formula, which is a good deal easier in speech. The maintenance requirement is calculated using income support rates as a benchmark for the basic needs of the children. The absent parent is required to contribute towards this figure from his assessable income at the rate of 50 pence in the pound. Assessable income is net income less allowances for living expenses, housing costs and any allowable travel-to-work costs. If he still has income left after meeting the maintenance requirement, he continues to contribute but at the lower rate of either 15, 20 or 25 pence in the pound, the exact rate depending upon the number of children for whom he has liability. This extra contribution is the additional element that the amendment would abolish. The additional element is intended to allow children in first families to share the prosperity of an absent parent as they would have done if the parents had not separated.
If the amendment were accepted, the maintenance requirement, which is fixed by reference to income support levels, would be the maximum payable for any child, even if the absent parent were wealthy. Very few children whose parent with care was on income support would see any improvement at all in their standard of living unless the parent with care obtained a so-called top-up order. This would involve going to court for the initial order and further applications to the court for any future variations. So the parents with care involved would suffer the inconvenience which the one-stop service provided by the agency was intended to avoid; would probably incur extra costs; and all this with no guarantee of a successful outcome.
Earlier in the Report stage I drew attention to the fact that, whatever iniquities are being laid at the door of the agency and the formula, the fact is that most first families are still poorer than second families. That is particularly true if the man in question has a reasonably high or very high income. His second family will enjoy all those benefits. If the noble and learned Lord's amendment were accepted, a man's first children, for whom I believe he has considerable responsibility, would receive nothing other than the bare minimum. I cannot believe that that is right.
We fully recognise that there comes a point where maintenance is providing quite a high standard of living for a child and it would not be right to require more under a formula approach. So current rules already ensure that an absent parent's maintenance liability does not increase indefinitely as his income rises. We consider that these rules are fair.
It is important to remember that from April 1993 all separating couples, with the exception of those where the taxpayer is not involved and the parties are able to reach an amicable agreement, have to use the Child Support Agency to make arrangements for child maintenance. This amendment fails to recognise that many of those involved will have incomes well above those paid to income support recipients. It is quite illogical to suggest that liability in such cases should be restricted to the maintenance requirement, which is based on income support levels. The additional element represents a logical method of ensuring that better-off absent parents make a contribution to maintenance that is commensurate with their level of income. It is a necessary part of the scheme.
The noble and learned Lord has a bit of fun at my expense on the issue of the formula. However, I hope that he realises that the additional contributions represent a serious point. There are good grounds, to which I believe the great majority of people would subscribe, for agreeing with that.
Lord Carter: My Lords, before the noble Lord sits down, on a point of information, does he agree that it is unusual to expect a layman to read an Act of Parliament and use that as his guide? Is he aware that the excellent
Lord Mackay of Ardbrecknish: My Lords, the noble Lord is quite right. I am reading Child Support: The Legislation, a commentary by Edward Jacobs and Gillian Douglas. If we are advertising books, we might as well both do it. The noble Lord makes a very valid point. The handbook is clearly set out, and anybody going through it will be able to work out the amounts; and certainly with the help of the agency an absent parent can clearly see how the conclusions were drawn.
But the main point of this amendment is the one that I make about an absent parent who has a reasonable standard of living and a reasonable income. My contention is that his first child or children ought to share in some of that prosperity.
Lord Simon of Glaisdale: My Lords, the noble Lord has explained the object of the formula but not at all how it works. His speech has once again been redolent of objurgations against absent fathers. He deals with the very rare case in which the absent father has a high standard of living; he keeps a second family and the first family is on the breadline.
I have spent much of my life dealing with such maintenance problems. Throughout this evening what the noble Lord has been pursuing is a vendetta which the department and the Child Support Agency have maintained against absent parents. As I said earlier, picking up an observation of the noble Baroness, Lady Hollis, the normal picture is that ordinary people, overwhelming in number, cannot afford two families. As soon as the divorce law is altered, enabling an ordinary person to have two families, in the overwhelming majority of cases both families go down to the poverty lineboth of them. It is quite wrong to draw the picture of the poverty stricken first family and the opulent second family, rolling in wealth. That can hardly happen except in a minority of cases.
We greatly welcome the advent to our debate of the noble Lord, Lord Lyell. He invited the Minister to say that the officials could explain the formula to the unfortunate parent. In that the noble Lord was woefully disappointed. There was no such explanation. If the formula is so explicable, why has there been this state of egregious error in assessing maintenance payments under the Act? The truth is that the officials, no more than my noble and learned friend the famous mathematician, have been able to understand what this
As I said, it is simply not good enough to legislate in this way such that the people who are affected cannot understand what is happening to them. I have no sympathy at all with the violence shown to the child support officers. But many of the people have felt deeply ill used because, instead of an explanation, they are given a formula that they cannot understand even when it is explained to them. As I said, I do not propose to press this amendment to a Division. Accordingly, I ask leave to withdraw the amendment.